Corn followed neighboring soybeans to modest gains, and ARC mentions managed funds this week hold a larger short position than expected. Active harvest lies ahead, and progress rather quickly in October amid warmth and dryness. But cash wheat prices continue to move higher, including feed wheat, and as mentioned at midday the short corn trade has gotten rather crowded.
Managed fund as of Tuesday were short a net 135,000 contracts, up 15,000 from the previous week and the second largest mid-Sep total on record (second to last year). ARC estimates funds’ short position this evening just marginally smaller at 125-127,000 contracts. New selling must come from the farmer, who is not at all anxious, particularly as bins were cleared out in late Aug/early Sep.
Otherwise, there’s still talk of substantial ethanol plant capacity over the next several months. A US yield trend will be better defined in the next 2-3 weeks. A close above $3.55 turns December’s chart mildly positive, and we’ll stay patient with respect to extending sales. We also mention Brazil will stay abnormally dry into early Oct, and this may cause more concern without an expansion in rainfall very soon thereafter.
